Trials are set to begin this month for two men accused of conspiring to manufacture untraceable automatic-rifle silencers for a clandestine Navy office. The directorate is suspected of running a secret weapons program.

A little-known Navy intelligence office at the Pentagon called
the Directorate for Plans, Policy, Oversight and Integration paid
$1.6 million for 349 silencers from a hot-rod auto mechanic in
California ‒ who is the brother of the directorate’s boss,
according to charging documents. The untraceable weapons
attachments cost only $10,000 in parts and labor to manufacture.

“According to the records that have been made public, the
crux of the case is whether the silencers were properly purchased
for an authorized secret mission or were assembled for a rogue
operation,” the Washington Post’s Craig Whitlock reported.

‘Wanna-be spook-cops’

The directorate has fewer than 10 civilian employees, most of
whom are retired military personnel. Its mission is to provide
back-office support and oversight for Navy and Marine
intelligence operations. But at some point, prosecutors say, the
office shifted into a grey area of “wanna-be
spook-cops,” a former senior Navy official familiar with the
investigation told the Post.

“I know it sounds goofy, but it was like they were building
their own mini law enforcement and intelligence agency,” he
added.

A former senior Defense Department official agreed with that
assessment.

“By design, that office is supposed to do a little more than
policy and programmatic oversight,” the former defense
official said. “But something happened and it lost its way.
It became a case of the fox guarding the henhouse, and I suspect
deeper issues might be in play.”

No-bid contract for untraceable silencers

In March, prosecutors charged Lee Hall, 52, of northern Virginia,
and Mark Landersman, 53, of California, with conspiracy to
illegally manufacture firearms, transport unregistered firearms
in interstate commerce and commit mail fraud. Hall was also
charged with theft of government money, according to a Justice
Department statement.

Based on the recommendation of David W. Landersman, the senior
director for the Navy office, Hall, a directorate employee,
initiated a no-bid (or single source) contract with Landersman’s
company, Advanced Machining and Engineering (AME), for the
purchase of the silencers, which AME was not licensed to
manufacture or sell. The attachments were manufactured and
shipped without serial numbers, according to court records.

Prosecutors have said the silencers were acquired for a highly
secretive military operation codenamed UPSTAIRS. The only
information about the “special access program” in the
prosecution’s court papers is that a directorate official told an
unnamed witness that the silencers were intended for Navy SEAL
Team 6, the elite commando unit that killed Osama bin Laden. But
representatives for SEAL Team 6 told federal investigators they
had not ordered the silencers and did not know anything about
them, according to the court papers, the Post reported.

The badge that sparked an investigation

The investigation into the contract began in January 2013 when a
directorate official Tedd Shellenbarger, showed up at a Defense
Intelligence Agency office in Arlington and asked for a badge
that would allow him to carry weapons on military property,
according to prosecutorial statements. The request ‒ which raised
suspicious because the Navy office dealt primarily with policy
matters and lacked law enforcement powers ‒ prompted Naval
Criminal Investigative Service (NCIS) to obtain a warrant to
search the directorate’s offices at the Pentagon. Agents found
badge materials and other documentation that led them to broaden
their investigation, the Post reported.

As NCIS delved deeper into the directorate’s workings, the Navy’s
investigative arm discovered emails and a paper trail pertaining
to the $1.6 million, no-bid contract to buy the silencers from
Landersman.

Destruction of evidence

The trials have been made more convoluted by the destruction of
potential evidence. At a pretrial hearing, one of Mark
Landersman’s defense attorneys accused the Navy of impeding the
investigation by destroying a secret stash of automatic rifles
that the silencers were designed to fit. Indeed, a stockpile of
1,600 AK-47-style rifles (collected overseas and stored in
Pennsylvania) were destroyed, the Post reported. Those weapons,
along with the untraceable silencers, could have been used by
American or foreign forces without being linked to the United
States, one source said.

Hall’s lawyers have also complained about the destruction of
evidence, after two Navy security officers testified that they
burned directorate papers in November 2013, just three days after
Whitlock’s first article on the investigation was published.
Francine Cox, one of the security officers, acknowledged that she
was aware the Navy directorate was under scrutiny and that she
had read the Post article shortly before burning the documents.
But she said she did not think the papers were important.

“I didn’t think the information we had was pertinent,”
Cox testified at a pretrial hearing in July. “If you don’t
tell me to hold onto something, I don’t have to hold onto
it.”

Hall said the burned documents were crucial to his defense, as
they included handwritten notes and other papers showing he
received approval for the purchase of the silencers from an
undersecretary of the Navy.

“My notes would show I acted in good faith,” Hall
testified at the July hearing.

District Court Judge Leonie M. Brinkema refused to drop the
charges against the directorate employee, but chastised the Navy
for destroying the documents.

“I don’t find any nefarious evidence, or evidence of bad
intent, but it sure does look to the court like negligence,”
she said.

Other conspirators?

So far, Hall and Mark Landersman are the only two who have been
charged. Prosecutors have referred to David Landersman in court
papers as a conspirator in the case, but he has not been charged.
Shellenbarger and three other directorate officials were placed
on leave due to the badge incident, but have not been indicted.
Shellenbarger has cooperated with the investigation and may be
called as a witness in Hall’s trial. He has since returned to
work for the department.

Another Hall witness may be Robert C. Martinage, a former acting
undersecretary of the Navy, who reportedly gave Hall verbal
approval for the secret program. Martinage was forced to resign
in January after investigators uncovered evidence that he engaged
in personal misconduct unrelated to ‒ but discovered during ‒ the
investigation into the silencers.